Retiree Stop-Loss Reinsurance
Retiree Stop-Loss Reinsurance
Healthcare reform bills pending in the United States Congress in 2009 create incentives for employers to continue providing certain retirees with health insurance. They do so by providing free partial reinsurance for annual claims within a certain band. This Demonstration explores the value of the reinsurance subsidy provided under the two leading reform contenders, H.R.3590, the Patient Protection and Affordable Care Act (Senate), and H.R.3962, the Affordable Health Care for America Act (House of Representatives).
You select the size of the retiree pool. You also determine a lognormal distribution of retiree annual claims by selecting the mean size of annual claims and the standard deviation of annual claims. You set the percentage of claims that the reinsurer will pay if those claims are within a user-specified amount of a user-specified "attachment point". The Demonstration outputs a log-log plot showing the distribution of claims and the zone in which claims are reinsured. It also produces a chart showing the actuarial value of the claims of the pool (), the actuarial value of the reinsurance (), the actuarial value of the unreinsured claims () and two ratios: , (the ratio of unreinsured claims to the actuarial value of all claims) and (the ratio of reinsured claims to the actuarial value of all claims).
A
R
U
U/A
R/A
The default values of the parameters mimic those established by the leading bills pending in Congress as of November 2009.